Share this Story: COVID-19: Iveson warns of further temporary layoffs, delayed construction projects as Edmonton faces $109.8 million shortfall by September

Trending

Article content

The City of Edmonton will consider further temporary layoffs and delaying construction projects instead of raising property taxes to overcome an estimated $109.8-million shortfall by September from the COVID-19 pandemic.

The city has two weeks to find savings in the current budget as it can’t run a deficit. Although a property tax increase of more than eight per cent would free up the necessary cash, Mayor Don Iveson reaffirmed that isn’t on the table during Wednesday’s council meeting.

COVID-19: Iveson warns of further temporary layoffs, delayed construction projects as Edmonton faces $109.8 million shortfall by SeptemberBack to video

Instead, the city is looking at all possible options to save taxpayers money and is prepared to reduce the 2.08 per cent tax increase by about one per cent. A reduction in service expenses, mostly through reduced transit, is expected to save the city $32 million.

“Because there is no appetite anywhere for large tax increases to address the shortfalls in revenues and our extraordinary costs and because council does not wish to run deficits it means we will have to make more hard decisions that affect our operations,” Iveson said. “In addition to looking at personnel, we’re going to need to look at some delays in infrastructure spending to free up discretionary cash to cover the impacts of COVID-19 on this year’s budget.”

Advertisement

Story continues below

This advertisement has not loaded yet, but your article continues below.

Article content continued

Funding for neighbourhood renewal projects could be impacted as well as undetermined construction projects in the future as the city recommends a reduction in the capital budget come 2023. The goal is for the 2020-22 capital project plan to continue as planned.

“We want to maintain the bulk of the infrastructure program because of the important role it plays in sustaining employment in the city. We do have certain projects that are funded with discretionary funds that are maintenance projects that we might be able to defer for a year, or two” Iveson said. “Roadwork is so far not one of the things that we’re looking at for that because now is a great time to get in and be doing it because there’s less disruption for people.”

Advertisement

Story continues below

This advertisement has not loaded yet, but your article continues below.

Article content continued

Iveson reiterated his ask to the province to support $2.1 billion in ready-to-go construction projects in the city that could help stimulate the economy and create 6,400 jobs. With no answer yet, the city may be able to capitalize on any future infrastructure investment when the capital budget is discussed in late May.

If the economic shutdown lasts through the end of the year, the city estimates a tax-supported revenue reduction of $220 million. Iveson said cities continue to urgently call for a financial backstop from senior levels of government in order to keep operating as long as the pandemic state continues.

Advertisement

Story continues below

This advertisement has not loaded yet, but your article continues below.

Article content continued

The city has already guaranteed a two-month property tax deferral for all residents and businesses that may be extended to match the province’s deferral of non-residential education taxes. This could take a big bite out of the city’s cashflow if many residents take up the deferral offer with taxes making up about 57 per cent of revenues.

“There is growing concern that the viability and liquidity of our operations is no longer a sure thing across this country, which is extraordinary,” Iveson said. “If things get really bad, we’re going to need significant support from senior orders of government to avoid deficits or huge tax increases or massive loss in service delivery or crippling infrastructure cutbacks.”

Council met privately for several hours Wednesday to discuss possible adjustments to the city’s labour force with more details expected to be made public next week, Iveson said. The city has already temporarily laid off 1,600 employees from the recreation branch.

Recommendations to address the funding shortfall through mid-September will be brought forward to council for discussion and final tax rate approval April 27.

Share this Story: COVID-19: Iveson warns of further temporary layoffs, delayed construction projects as Edmonton faces $109.8 million shortfall by September

Trending

Related Stories

This Week in Flyers

Article Comments

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

Notice for the Postmedia Network

This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Service and Privacy Policy.